Three essays in the theory of preferences

The Review of Economic Studies, 1978

We present two arguments suggesting that the principle of revealed preference fa- cilitates the introduction of procedural and psychological aspects of choice to economic models. First, some choice procedures cannot be described as the outcome of maximizing a preference relation. However, they can be characterized and difierentiated based on a simple revealed preference argument, i.e. based on simple properties of choice. Second, even if a choice procedure corresponds to maximizing a preference relation, there may still be a revealed preference justiflcation to study the psychology of the pro- cedure. The information concerning the available set of alternatives is often coupled with other information pertinent to the psychology of choice. This latter information can shed light on aspects of choice not fully captured by a preference relation, and hence should be part of the revealed preference analysis.

2006

SSRN Electronic Journal

We provide a representation theorem for revealed preference of an agent whose consumption set is contained in a general topological space (separable Hausdorff space). We use this result to construct a revealed preference test that applies to choice over infinite consumption streams and probability distribution spaces, among other cases of interest in economics. In particular, we construct a revealed preference test for best-responding behavior in strategic games.

Mathematical Social Sciences, 2021

We provide a utility representation theorem for the revealed preference of an agent choosing in an arbitrary space endowed with a separable partial order. The result can be applied to construct new revealed preference tests for choices over infinite consumption streams and probability distribution spaces, among other cases of interest in economics. As an illustration, we construct revealed preference tests for best-responding behavior in strategic games and infinite horizon consumption problems.

OEconomia, 2017

Synthese, 2011

A much discussed topic in the theory of choice is how a preference order among options can be derived from the assumption that the notion of 'choice' is primitive. Assuming a choice function that selects elements from each finite set of options, Arrow (1959) already showed how we can generate a weak ordering by putting constraints on the behavior of such a function such that it reflects utility maximization. Arrow proposed that rational agents can be modeled by such choice functions. Arrow's standard model of rationality has been criticized in economics and gave rise to approaches of bounded rationality. Two standard assumptions of rationality will be given up in this paper. First, the idea that agents are utility optimizers (Simon). Second, the idea that the relation of 'indifference' gives rise to an equivalence relation. To account for the latter, Luce (1956) introduced semiorders. Extending some ideas of Van Benthem (1982), we will show how to derive semi-orders (and so-called interval orders) based on the idea that agents are utility satisficers rather than utility optimizers.

Journal of Mathematical Economics, 2013

When preferences are quasilinear, revealed preference restrictions on prices and quantities are equivalent to the characterization of the subdifferentiability of a utility function underlying those choices that is, under certain conditions, unique up to a constant. The duality between prices and quantities can be replaced by a duality between utility functions and quantities to show that preference revelation restrictions are equivalent to the subdifferentiability of a payment scheme underlying those choices that is, under similar conditions, unique up to a constant.

Quarterly Journal of Economics, 2009

Economics Meetings, for useful comments. We are also indebted to Xiaochen Fan and Eduardo Perez for able research assistance. Bernheim gratefully acknowledges financial support from the NSF (SES-0452300 and SES-0752854). Rangel gratefully acknowledges financial support from the NSF (SES-0134618) and the Moore Foundation. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.